How the fintech industry can boost UK economic growth by helping SMEs

Technological innovation is a main driver for progress. From the creation of the printing press, which fostered the development of skills, knowledge, and innovation, to the advent of industry 2.0, which opened new sectors and improved communication, record-keeping, and global access to information, technological growth goes hand in hand with economic growth.

As such, spending on innovation, research and development - as well as investment in innovation - is vital to support continued progress.

It was extremely welcome to see that in his Budget speech, Chancellor Jeremy Hunt talked about making the UK a science and technology superpower. And the leading role that the country’s fintech industry is already playing in making this a reality cannot be understated.

“There are opportunities to accelerate the progress of the technologies that will define this century by encouraging investment and smarter regulation,” Hunt said, as he confirmed the Government’s priority for an enterprise-focused economy that attracts and supports the most dynamic and productive companies.

Economic growth increases employment, raises living standards, and boosts public finances. All of which are essential to get right if we are to navigate the tricky backdrop of the cost of living crisis, the war in Ukraine, and continued inflation.

So, how do fintech companies contribute to economic growth and make the UK more competitive on a global stage?

CRIF’s immediate focus is to help UK small and medium-sized businesses (SMEs) struggling against the tough economic backdrop. Hundreds of thousands of small and microbusinesses are at risk of folding this year, according to recent research, due to financial pressures brought on by the crisis. This is because businesses have been dealing with higher energy bills, weaker consumer confidence and rising costs for supplies and materials. 

Easy access to finance is essential to help firms to not only navigate rising costs, but to invest in new products and services that help their business grow and contribute to creating the technology superpower Mr Hunt outlined in the Budget. But for too many SMEs, accessing finance is an unnecessarily difficult process, with burdensome form filling and long decision times, which make the barriers to access more troublesome than for their larger counterparts.

To help more businesses to access the finance they need, CRIF has partnered with iwoca, a leader in business lending, to offer SMEs access to an open banking-powered credit profile through our CRIF Credit Passport® service. The service is fully integrated into iwoca's lending platform, making it easier for SMEs to get instant lending decisions, removing unnecessary burden and uncertainty caused by waiting for a decision.

Business owners can apply for a loan directly through their Credit Passport® account, with the application pre-populated with information from their credit profile supplied by CRIF. It means a loan application can be completed faster and more efficiently, with a decision on loans of up to £25,000 made almost instantly and the money deposited in an SME’s bank account the same day. For business owners requiring larger loans of up to £500,000, a funding decision can be made within just 24 hours.

With economic uncertainty exacerbating the already significant challenges with securing finance, small business owners deserve a better service when they apply for funding. Our new partnership reduces uncertainty for businesses over funding decisions while making the process smoother and faster. 

By speeding up the process and helping SMEs get access to finance quicker, they can focus on what really matters – growing their business. Credit Passport® and iowca’s partnership is an example of how important fintech can in boosting the UK’s economic recovery and ensuring the country becomes a science and technology superpower.